AstraZeneca partners with WuXi for arthritis drug

AstraZeneca ($AZN) is teaming up with Chinese CRO WuXi PharmaTech ($WX) to develop and commercialize MEDI5117, a biologic for rheumatoid arthritis and other inflammatory diseases.

The deal is through AZ's MedImmune division, which will enter into a joint venture with WuXi's operating subsidiaries group, WuXi AppTec. They will start Phase I trials of the drug and, eventually, market it in China. The two companies will have equal ownership of the venture, according to AstraZeneca, and, once MEDI5117 is on the market, AZ will have the option to buy the full rights. In the meantime, WuXi will earn revenue based on services provided to the joint venture, and AZ will get milestone payments as the program progresses.

The deal is a boon for AstraZeneca and its overseas business, Reuters reports. Bahija Jallal, MedImmune's head of research, told the news service that the WuXi partnership will get the drug on Chinese shelves four to 6 years sooner than if the company went the traditional route of getting an import license after FDA approval.

For WuXi, the agreement only builds on the CRO's clout and gives it a chance to cash in on what both companies say is a huge unmet need in China. "WuXi is working to build long-term drug development partnerships with leading biopharmaceutical companies like MedImmune to help accelerate the development of novel medicines for the large and rapidly growing Chinese pharmaceutical market," CEO Ge Li said in a statement.

The CRO is looking to move past last year's case of intellectual property theft, in which a WuXi employee stole small quantities of investigational Merck ($MRK) drugs and flipped them on the Internet. That employee has since been convicted and sentenced, and WuXi has maintained that it was an isolated incident that doesn't reflect on what Li called the company's "culture of commitment to IP security."